Basically
File size=data rate times duration.
You have to lower the data rate to shrink the file size.
That will make the file look even more awful. The more data you throw out the worse it may look. It's the nature of compression.
What you may do is use a smaller frame size. That gives you more bits per pixel (helps quality) because there's less pixels in the frame. Additionally if you don't mind the look you can lower the frame rate which is fewer pixels per second (also given you more bits per pixel).

[Matt Walker]"it needs to be compressed to a file size no greater than 10MB. It still needs to be WMV format."

I'd ask why to both.

Windows 7 which comes with Windows Media Player 12, can play H.264 .mp4 and even .mov. Quicktime player not needed. True you may be dealing with an older OS or an older app.
I'm not sure why you'd have a 10MB file limit. That's extremely small. Maybe you're sending the file by email. That's not a good way to distribute files. You can send a much larger file using a free YousendIt or DropBox account.
For screening you can use YouTube or Vimeo. YouTube has "unlisted" and Vimeo has password protection if it needs relative privacy. Vimeo allows their encoded version to be downloaded and Vimeo Plus allows your uploaded source to be downloaded.

Thanks for your reply - I've been reading through loads of your posts all day.

In response to the 10mb limit and WMV restriction - my employer has a pretty archaic hosting system on the network our sites' computers share. I've been told by the powers that be that the max size is 10mb and Im just looking at my options as I'm trying to get the video hosted on something like Vimeo and password it. They're just concerned the footage will be open to downloading etc.